Britain's 200,000 farmers and landowners, who receive tens of billions of pounds of European subsidies for owning land and growing food, will escape most of the cuts because European common agricultural policy payments are made directly from Brussels. But conservation and green building efforts may be severely hit by a significant withdrawal of funding for regional development agencies which subsidise many agricultural, environment and renewable energy schemes.

Defra, which oversees planning, recycling, waste and conservation efforts and large watchdog organisations like the Environment Agency and Natural England, said it would have to slash capital programmes "across the board". A spokeswoman said that it could take "weeks" to finalise details. "Nothing has been decided yet," she said.

However, she added that the cuts would include flood defence funding, surveillance of some diseases, and IT programmes for farmers. Many of Defra's "daughter" or "arm's-length" bodies like British Waterways are also expected to be hit hard.

Decc, which spends far less on administration than Defra, is expected to have to cut deeply into home energy-efficiency programmes which could undermine the public take-up of low-carbon technologies. "It will be challenging for Decc as it already has low administrative spend, so we will have to look at some of our programme work," said a spokesman. He added that budget cuts would be made to as yet unallocated funds and no existing programmes would be hit.

The Environmental Transformation Fund, which invests in emerging low-carbon technologies, will see its budget for this year cut by 22% to £120m, and the Low-Carbon Building Programme (LCBP), a grant scheme to support the installation of clean energy technologies in homes, will end immediately and will not be extended. LCBP grants for electricity-generating systems such as solar photovoltaics and wind turbines had already been withdrawn following the introduction of feed-in-tariffs that reward homeowners for each unit of clean power they produce. But until the government's announcement on Monday, grants were still available for heat-producing technologies such ground-source heat pumps and solar water heaters. The scheme is now closed to new applicants.

Although the ending of the LCBP is a relatively small cut – the savings will be just £3m – the announcement will most likely mean there will be no support for greener heating systems until at least spring 2011, when Labour's proposed Renewable Heat Incentive scheme is scheduled for launch.

Any cuts that Defra makes come on top of similar swingeing cuts made in 2007-08 and 2008-09 when £200m was slashed from the budgets of British Waterways, nature conservation organisations and other environment initiatives. "We have been cut to the bone already. There's not much left to slash," said one Defra insider today.

Environment groups reacted cautiously to the cuts. Ben Stafford, head of campaigns at the Campaign to Protect Rural England (CPRE) said: "The pledge to cut £600m from quangos looks politically attractive, although we don't at the moment know exactly where these cuts might fall. Ministers must recognise that cuts to public bodies will not always be consequence-free. A number perform important functions in the fields of planning and natural environment protection, and it is important that their departments champion these functions, including the ongoing importance of independent advice to ministers. Swinging the axe too vigorously now could mean greater costs later."

Paul King, the chief executive of the UK Green Building Council, said: "The coalition must be careful that the proposed abolition of Regional Spatial Strategies does not result in missed opportunities to deliver sustainable infrastructure, such as heat, water and waste across local authority borders. Integrated policy to deliver these services can offer carbon and cost savings – which can be missed if we don't have a regional overview."

The RSPB today urged the government to consider the health of the environment when it makes its decisions about where to cut and where to invest.

"We are calling to the government to freeze the costly and environmentally perverse Renewable Transport Fuel Obligation [which drives demand for unsustainable biofuels], protect existing co-financing funding for agri-environment schemes, invest in marine protected areas and end the investment by the nationalised banks in climate polluting activities," said a spokesman.